On Friday, US President Donald Trump announced that his administration had made an agreement with Venezuela’s interim government to secure control of the country’s oil reserves — the world’s largest, as per current estimates. In keeping with his style, Trump has described the deal as a game-changer for the US economy, which is currently facing high fuel costs because of the war in West Asia. Trump will try his best to portray it as a big achievement before the US
On Friday, US President Donald Trump announced that his administration had made an agreement with Venezuela’s interim government to secure control of the country’s oil reserves — the world’s largest, as per current estimates. In keeping with his style, Trump has described the deal as a game-changer for the US economy, which is currently facing high fuel costs because of the war in West Asia. Trump will try his best to portray it as a big achievement before the US mid-term polls in November.
Whether, and more importantly, when, the described benefits materialise for the US economy, is going to be more complicated than what Trump is claiming. Venezuela’s oil fields have suffered from decades of mismanagement and will require a massive capital infusion to scale up production as well as profits. Many private oil companies in the US are aware of this challenge and, therefore, have been hesitant to commit to investments in Venezuela.
What further complicates matters is the fact that political instability continues to exist in the Latin American country that saw its authoritarian leader kidnapped in a surprise US operation last year. The interim government, which has made the oil deal with the US, refuses to discuss conducting elections in Venezuela. Even if the US were to succeed in scaling up oil production and profits from Venezuela, the larger question of a superpower arm-twisting a weaker country into offering its precious natural resource will continue to remain. It is interventions like these which triggered a Left upsurge in large parts of Latin America a couple of decades ago. Every such instance underlines the demise of theso-called rules-based world order. It is more about deals than democracy.
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